Big Challenge for Asian Modernization


March 30, 2017

Cultural-Intellectual Reinvigoration: Big Challenge for Asian Modernization

by Michael Heng Siam-Heng (received by e-mail with thanks)

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Asia has been experiencing an economic revival since the 1960s, first Japan, then the Four Little Dragons, the Asian Tigers and now China and India. With Asian economies doing relatively well against the background of global recession, many Asians hope that the 21st century would be the Asian Century. But what kind of Asian Century?

How would Asians like this period of their history to be understood and remembered in centuries ahead?  It could be a period of impressive economic growth but also known for its environmental degradation, crimes, corruption, social disparities, religious extremism, and social conflicts. Or it could be a period that draws on the best of human achievements and advances them.  The second case would contribute immensely to a new global civilization characterized by peace, social justice, cultural brilliance, technological advancement, and sustainable economic growth.

I will dwell on four points.  First, on what basis can we argue for an Asian cultural-intellectual rejuvenation? Second, is such a historical project necessary? Third, three challenges facing us. Fourth, being in Malaysia, I will briefly touch on roles that can be played by this country.

Conceptual Basis for an Asian Cultural Rejuvenation

History tells us that radical economic and social transformations are often accompanied by intellectual ferment and cultural effervescence. The transformations generate social dislocations that challenge existing cultural norms, ideas, and social institutions.  The problems are serious and they engage the best brains of the time. In attempts to solve the issues, these best and brightest draw on their intellectual heritage, learn from other sources, cross-fertilise them and creatively synthesize them to produce original thoughts.

Examples are Ancient Greece, the Spring-Autumn-Warring period of China, the Islamic golden age, and the Maurya and the Gupta period of India. The most recent experience is the European Renaissance and Enlightenment, which produced giants in the fields of philosophy, natural sciences, social sciences, fine arts, music, architecture, and literature. We all know at least a dozen of such names.  These European thinkers or cultural giants acted as a positive force during that critical period, functioning both as a social conscience and as sources of forward-looking ideas. Their works have shaped the character of modern European civilization and continue to exert an influence on our thinking and cultures even until today.

The Need for the Historical Project

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Deng Xiao Peng–China’s Great Modernizer–Pragmatist

Ever since Asia suffered defeat and humiliation in its encounters with Western imperial powers, Asian leaders slowly realized the crucial importance of reform and modernization in order to face the onslaught. Country after country began to borrow ideas from the West, not all of which were positive, as we see in the case of Japanese imperialistic aggression.

By the end of the 19th century, Japan, through its  Meiji Restoration (明治維新), was the most successful in modernizing its military and economy, fulfilling its national agenda of being both powerful and wealthy. Once powerful, Japan began to behave aggressively, turning Korea into its colony, seizing large tracts of Chinese territories and occupying Southeast Asia. It was a military adventure which ended in total defeat at the closure of WWII.  To use a  simple metaphor, modernization is like the flight of a bird.  It requires two wings to function in a harmonious manner.  Being wealthy economically and strong militarily is one wing.  The other wing is sound cultural-intellectual development.

Fast forward into early 21st century, Asia has regained much of its share of global economy.  Statistics provided by the IMF, the World Bank and transnational banks testify to this shift of economic power from the West.

To the ordinary public, this shift is visible, in the form of improved standards of living, and the new physical landscape.  The most visible is the super-tall buildings – architectural icons of modernity.  Of the ten tallest buildings in the world, 8 are in Asia, 2 in the USA.

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In contrast to the modern landscape in Asian cities, Asia has a string of disturbing social ills.  There is dysfunctional culture exhibited by the people at the top running the show.  State infrastructure projects are awarded to friends and relatives rather than to the most competent.  Newspapers are full of examples of practices that reflect mindsets that are out of sync with the demands of a modern economy. In societies where there are modern economic and legal institutions, many of these institutions lack integrity and independence.

Even in a modern economy and society operating efficiently, we need something more.  Again using the example of Japan.  It is the most modern Asian country. Yet its modernization is confined to the fields of economy, technology, and life styles. It has not undergone a philosophical development based on a foundation of critical rationality and humanism. The Japanese nation as whole has not been able to come to terms with its atrocities during World War II.

 Three Major Challenges

Asians face three major challenges at this juncture of their history, namely (a) drawing on their own cultural resources and rejuvenating them, (b) learning from others, and (c) learning from each other.

The first challenge can be formulated as: how and what Asians can draw from their own cultural and intellectual resources in the process of dealing with new problems.

With an open and inquisitive mind, old ideas take on new meanings and interpretations in the context of new social problems. If a new interpretation provides an effective way in solving problems, the new solution is likely to find easier acceptance because it is framed in language familiar to the people. A sense of continuity is useful in coping with change.

Interestingly, there is often a link between the old and the new. Even a new philosophy is dependent on the intellectual achievements of the preceding centuries and millennia.  A scholar of the European Enlightenment observes that “enlightenment philosophy simply fell heir to the heritage of those [preceding] centuries. It ordered, sifted, developed and clarified this heritage rather than contributed and gave currency to new and original ideas.  Yet in spite of its dependence with respect to content, the Enlightenment produced a completely original form of philosophical thought.”  In other words, old beliefs can put on modern attires and assume modern colours. The result is a new idea.

This sounds rather straightforward. But it is not so if we observe carefully around us.  Hardcore conservatives prefer a literal and rigid interpretation of their traditions, all the more so if these are written. There is also the fear that in rejuvenating local culture and tradition to cope with the demands of a modern economy, the local culture and tradition may disappear, and that future generations will become culturally rootless.  Another problem is what to select from the past.

I believe that the proper attitude is to embrace change, and to see culture as something living, tradition as living tradition.  They are products of their times, and they will change with the demands of the time.

The second challenge is how and what to learn from others. To the extent that there are similarities in the issues involved in the transition from pre-modern societies to modern societies, we should learn from others’ experiences, both positive and negative. To quote the Indian philosopher Sarvepalli Radhakrishnan : “Similar experiences engender in men’s minds similar views”. Since the West has a longer history of modernization, Asia can certainly learn from them.

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Again like the first challenge, learning from others is not easy. Some believe that it is very difficult, or even impossible, to transplant ideas, values, and institutions that have sprouted and developed in a different culture and a different set of historical conditions.

Take the case of China’s difficult journey of learning after defeat at the hands of Japan in 1895. While the Chinese leadership welcomed the adoption of obviously more advanced technologies from the West, they had difficulties embracing the Western ideas and value system. The problem is less acute today but is not over.

What happened in China a century ago is happening in West Asia. The common belief was that “Eastern” culture of spirituality was superior to “Western” culture of materialism.  There is a fear that the spirit of local heritage and culture was threatened with destruction by the importation of western ideas and values.

Adoption and adaption of foreign ideas to local conditions is a long drawn out process, which requires creativity, flexibility, and openness. Though the process is complex, it has happened in history, in Southeast Asia, elsewhere in Asia, and Europe.

Evidence in history support the claim that we can borrow ideas that originated in a very different historical context, and adapt them to serve local needs or even improve upon them in the process of creative synthesis. Let me list briefly three examples. First example: Southeast Asia was able to adopt religious beliefs, ways of life, and institutions from India, China, the Middle East, and Europe. These influences from distant lands had originated in settings that were alien to Southeast Asia. Second example is Europe’s absorption of bureaucracy from China. Combining it with check and balance by civic society, the Western practice is more efficient and less prone to corruption, offering useful lessons for China. This is a vivid illustration of the Chinese saying, 青出于蓝而胜于蓝, or the pupil excelling the master. Third example: Buddhism was introduced to China, a country with a profoundly different culture. After centuries of acclimatization, we have a synthesis of the two cultural traditions known as “Chan” in Chinese and “Zen” in Japanese.

The sensible attitude of learning is to be open-minded and rational rather than be influenced by emotion and sentiments. We must be curious and humble while at the same be meticulous, critical and independent minded. Just as Asians should not feel a sense of superiority in being a source of Western modernization, they should not feel a sense of inferiority in borrowing from the West.  Learning from the findings of others can only increase the range of possible solutions.

The above two challenges are related. It is difficult to learn from foreign sources and adopt their useful elements if we are not culturally and intellectually confident. With confidence in our own cultural heritage, we are at ease to critically appreciate the achievements of others. And cultural confidence can only stem from a deep and critical understanding of our own cultural roots, to the extent of discarding outdated ideas and practices of our own traditions.

The third challenge is for Asians to know much more of each other’s history, intellectual achievements, and cultural traditions.  Though language may present a barrier, most Asian intellectuals use English as the second language which renders exchange of ideas possible. What holds them back is their attitude.  Asians tend to know more about Australasia, Europe and America than their Asian neighbours.  

Given the guarded attitude many Asians have regarding learning from the West, they have less misgivings regarding learning from each other. They can benefit from sharing their experiences in modernization.  In fact, Japan’s path of rapid economic development has provided valuable insights to Southeast Asia and later on China and India. This pattern of economic development is described as the Flying Geese, with Japan as the leading goose. In coping with the broader social and cultural issues arising from modernization, the Middle Eastern countries are more likely to consult the experiences of Malaysia and Indonesia than those from the West.

As a concrete project of mutual learning and co-operation among Asian countries, they can compile a set of books – the Great Books of the East, containing the cream of Eastern intellectual achievements. It is a doable project.  It serves as a platform for top scholars of Asian countries to work together, creating as a byproduct a network Asian intellectuals of similar interests.  It would produce a convenient reference work for libraries all over the world.  It world form a key component of common body of knowledge for serious minded global citizens.

Another concrete project is traditional medicine.  Asia is the home of traditional Chinese medicine, traditional Indian medicine, and traditional Middle Eastern medicine. It represents distilled knowledge accumulated over many centuries of medical practice, often under poor material conditions. It is thus evidence-based.  However, critics of traditional medicine often claim that it is not scientific because its research method departs from that of western medicine. Its theory needs a modern set of vocabulary and updated to take into account new medical findings. We can think of a productive sharing and conversation among the three streams of Asian traditional medicine. This is an area for active collaboration of Asian countries that can boost the cultural and intellectual confidence of Asia, while making concrete and valuable contributions to healthcare in the whole world.

Malaysia as the Italy of the Asian Mediterranean(Venice)

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Malaysia is unwilling to tap its rich diversity due to myopic Malay-centered leadership and  corruption–Bodoh Sombong

Cultural and intellectual rejuvenation is often a synthesis and product of the cross-fertilization of cultures and ideas.  Its birthplace is located at the cross-roads of diverse cultures and intellectual currents. For example, Italy, widely regarded as the birthplace of the European Renaissance, was an important meeting point of different cultures and intellectual traditions in the Mediterranean.

Malaysia can have an important role in such a historical process. Here, the four major currents of world civilizations (Chinese, Indian, Islamic and Western) are co-existing as mainstreams of social life. They represent invaluable resources. Southeast Asia is a region with a multi-layered sedimentation of diverse cultures. It is a vibrant, peaceful and forward-looking region when we compare it to other regions with similar historical background. If we borrow the language of the European Renaissance, Southeast Asia may be seen as a kind of Mediterranean region in the cultural revival of Asia and Malaysia can aspire to be the Italy of Asia (Venice).

Reinventing prevalent social-cultural practices is quite common in societies undergoing structural changes.  It is part of the efforts of a society to refine and refurbish the inner resources of their societies. It is through such processes of renewal that societies try to overcome internal stagnation and meet external challenges.

The process touches societies profoundly, involving ideas, values, morality, belief systems, culture, and institutions. It requires us to revisit our concepts of goodness, truth, and beauty.  The blossoming of culture represents the sublimation of the human spirit, the enrichment of human experience and the nurturing of human nature towards goodness. It is a project with both social and spiritual dimensions. It is a project with a historical soul.

Economic resurgence in itself does not guarantee a corresponding intellectual ferment and cultural effervescence. There are formidable obstacles in the long journey. First, Asian intellectuals may not rise to the call. Second, there is lack of freedom and internalized self-censorship that originates from a culture of fear. Third, there is no critical mass of thinkers to stimulate each other. Fourth, there are as yet no powerful social groups willing to adopt and champion new philosophies developed by their people.

The rise of Asia may thus be conceived of as an opportunity for an Asian cultural revival, which may or may not happen. Much depends on how Asians will make use of the opportunity. Will they translate the opportunity into a mission, and turn it into a reality?

The project of an Asian cultural rejuvenation is an ambitious undertaking.  It is likely to last for several generations. It has no walls and borders. Contributions from all corners of the world are warmly welcome. Though the stage is in Asia, the cast and audience are global.   This opens up a new arena of international cooperation for all those who aspire to contribute to the long term well-being of humanity.  As co-operation and competition with the West can be expanded to include friendly co-operation and competition in the field of ideas, this new arena could well be an alternative to the geopolitical rivalry between an emerging China and a US in decline.

Let us imagine that East Asia or South Asia could provide a case of cultural revival together with economic modernization.  It would be an attractive alternative to the current Western model for the Middle East. It may offer new insights and solutions for solving the whole array of social, economic and political problems there.

If and when Asian cultural and intellectual reinvigoration does happen in its full glory, it will lift Asian civilization to a higher level. In so doing, it will contribute to the cultural resources of the world and indeed to a richer modern civilization.  It will also impart a more profound and enduring meaning to the term Asian Century.

 

The Two Levels of Russia’s South China Sea Policies


March 29, 2017

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Number 376 | March 28, 2017

ANALYSIS

The Two Levels of Russia’s South China Sea Policies

by Alexander Korolev
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Russia’s policies regarding the South China Sea (SCS) dispute are more complex than they might seem. Moscow’s official position presents Russia as an extra-regional actor with no stakes in the dispute. According to the Russian Foreign Ministry, Russia “had never been a participant of the South China Sea disputes” and considers it “a matter of principle not to side with any party.” However, behind the façade of formal disengagement are Russia’s military build-up in the Asia-Pacific region, and the multi-billion dollar arms and energy deals with the rival claimants. These factors reveal that even though Moscow may not have direct territorial claims in the SCS, it has strategic goals, interests, and actions that have direct bearing on how the SCS dispute evolves.

One-fourth of Russia’s massive military modernization program through 2020 is designated for the Pacific Fleet, headquartered in Vladivostok, to make it better equipped for extended operations in distant seas. Russia’s military cooperation with China has progressed to the point that President Putin called China Russia’s “natural partner and natural ally.” The two countries’ most recent joint naval exercise – “Joint Sea 2016” – took place in the SCS, and became the first exercise of its kind involving China and a second country in the disputed SCS after the Hague-based tribunal ruling on China’s “nine-dash line” territorial claims. However, Russia’s relations with Vietnam are displaying a similar upward trend: Russia-Vietnam relations have been upgraded to a “comprehensive strategic partnership” comparable to the Russia-China relationship. Russia and Vietnam are developing joint gas projects in the SCS, and Moscow also is trying to return to the Cam Ranh naval base and selling Hanoi advanced weapon systems that enhance Vietnam’s defense capabilities.

Moscow’s actual behavior, therefore, hardly conforms to the neutrality of its official statements. The simultaneous enhancements of military cooperation with both Beijing and Hanoi – two of the major direct disputants in the SCS – make Russia’s intentions hard to interpret, and require a more holistic framework that encapsulates different levels of Russia’s foreign policy interests. Great powers play multi-level foreign policy games that may overlap in specific issue-areas. For Russia, the SCS issue is where two levels of its policies – systemic anti-hegemonic balancing and non-systemic regional hedging – intersect.

The first level – systemic balancing – is driven by the global power distribution and perceptions of major threats. As a systemic balancer, Russia challenges the US-led unipolarity in multiple ways, as evidenced by its policies in Georgia, Ukraine, and Syria. The drive to balance the system leader (the United States) makes Russia seek alignment with China, which, like Russia, also challenges American unipolar dominance and perceives the US “Pivot to Asia” as a major threat to its security. Thus, Russian and Chinese assessments of external threats coincide in that both countries consider US policies – NATO’s eastward expansion in the Russian case and the “Pivot to Asia” in the Chinese case – threatening. The pressure originating from the US-led international system and the resultant incentives to resist it generate a strong bottom line that pushes Russia and China together. From this perspective, the SCS for Russia is a part of a bigger global game that dictates that Russia does not go against China’s interests, but rather provides some tacit, if not open, support.

The second level – regional hedging – is motivated by domestic and regional considerations and materializes in a combination of policies aimed at diversifying Russia’s regional links and averting potential instability that could affect Russia’s economic interests in the Asia Pacific. It also heads Moscow’s commercial desire to profit from energy, infrastructure, and arms deals. By strengthening connections with Hanoi, including arms exports, military-technical cooperation, and joint energy projects, Moscow creates a more balanced power-and-interest configuration around the SCS, and simultaneously diversifies its portfolio of Asian partners, with Vietnam also serving as an inroad to the ASEAN community. This explains why Russia, while not opposing China’s policies, also appears sympathetic towards Vietnam’s concerns in the SCS. The intersection of the two levels creates the intrinsic ambiguity of Russia’s SCS policies.

The main implication of this “two-level game” is that the nature of the SCS dispute for Russia, as well as Russia’s corresponding policy responses, is a variable rather than a constant: the more the SCS dispute deviates from a regional issue of sovereignty into the realm of China-US confrontation, the more Russia’s behavior in the region carries the features of anti-unipolar balancing. Conversely, the less the United States is involved, the more Russia’s policies in the area remain aloof from the system-level balancing and the more likely they are to carry features of regional hedging.

So far, the aforementioned two layers of Russia’s policies in the SCS have worked well without contradicting each other:

Vietnam has benefited from cooperation with Russia not only because such cooperation is valuable in its own right, but also because given the closeness of China-Russia relations, it provides an extra gateway for improving relations with China, which Hanoi values. Unlike relations with the United States, partnership with Russia provides Vietnam with needed access to advanced arms and energy technologies while simultaneously helping to avoid being locked between the hammer and the anvil of China-US competition. Plus, Hanoi has long experience using Russian arms and military equipment.

Russia’s policies also resonate with Beijing’s strategic calculations. While the Russia-Vietnam strategic partnership with its strong military component may look anti-China, in reality it works for Beijing’s interests because it helps to prevent the consolidation of a Hanoi-Washington alliance. While being unhappy about Russia’s arms transfers to Vietnam, Beijing recognizes that a decline or termination of such transfers would result in Hanoi shifting from its current policy of diversifying military contacts, to a stronger lean towards Washington; this shift would close the US-led containment ring around China. Therefore, despite the emphatic resistance against the internationalization of the SCS dispute, Beijing accepts Russia’s greater involvement as well as Russia-Vietnam military cooperation.

Russia, by engaging both China and Vietnam, realizes its regional and global goals. It increases its stake in the Asian balance of power, slows down the US-Vietnam entente, and shapes the SCS dispute so that there is more room for multilateral negotiations. For Russia, maintaining the status quo, however imperfect it is, is better than dealing with a victory of one party over another.

About the Author

Alexander Korolev is a Research Fellow at the Centre on Asia and Globalisation in the Lee Kuan Yew School of Public Policy, of the National University of Singapore. He can be reached at akorolev@nus.edu.sg.

The East-West Center promotes better relations and understanding among the people and nations of the United States, Asia, and the Pacific through cooperative study, research, and dialogue.

Established by the US Congress in 1960, the Center serves as a resource for information and analysis on critical issues of common concern, bringing people together to exchange views, build expertise, and develop policy options.

The Asia Pacific Bulletin (APB) series is produced by the East-West Center in Washington.

APB Series Editor: Dr. Satu Limaye, Director, East-West Center in Washington
APB Series Coordinator: Peter Valente, Project Assistant, East-West Center in Washington

The views expressed in this publication are those of the authors and do not necessarily reflect the policy or position of the East-West Center or any organization with which the author is affiliated.

For comments/responses on APB issues or article submissions, please contact washington@eastwestcenter.org.

East Asia: Trade Regime critical for Economic Stability and Political Security


East Asia: Trade Regime critical for Economic Stability and Political Security

by  EAF Editorial Group

What the Trump Administration will ultimately do to the shape of the global trade regime is difficult to foretell but there’s no question that it will change it forever, even if there is strong global push-back against Trump’s threat to unravel trade agreements and carry a protectionist stick.

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The trade regime, and the way in which it encourages open trade and international interdependence among those who sign on to its rules, is not simply an instrument of economic policy strategy that can be changed without political consequence. For most countries, and certainly those in East Asia which are so dependent on open trade to sustain their basic livelihood, the trade regime is a critical instrument of political security.

Trump has already signed executive orders to withdraw the United States from the Trans-Pacific Partnership (TPP) and renegotiate the North American Free Trade Agreement (NAFTA). What appeared noisy campaign rhetoric has been transformed into concrete action.

Trump’s withdrawal from the TPP is no big deal in itself: with the exception of what it promised in terms of liberalisation of the Japanese economy, the economic effects of the deal that was on the table were oversold. Even renegotiation of NAFTA may have more limited economic consequences than have been threatened. But these steps, together with the threat of punitive tariffs on imports from China and Mexico, plus a total retreat from multilateral or regional trade agreements, tears at the core principles upon which the US supported postwar economic order had been built.

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POTUS Donald J. Trump and China’s President Xi

Anyone who says that a switch of this magnitude and direction in the trade policy strategy of the world’s largest economy and second-largest international trader is of little consequence is seriously delusional. The old certainties that brought prosperity and a significant measure of stability to world affairs for nearly three-quarters of a century after the Second World War are under serious threat.

A world in which the defining characteristic is a lot of bilateral trade agreements rather than one in which multilateral and regional frameworks are predominant imposes costs on business and consumers alike because of the need for compliance with different rules of treatment across different trading partners. It also injects a different tone into international politics. These concerns are what motivates the argument for regional and global trade regimes that govern international flows of goods and services through unified rules and standards.

The broader the framework within which trade can take place, the greater will be the scope for division of labour and the higher the gains from international trade. Bilateral trade deals can’t replicate the gains from regional and multilateral agreement, and they will unhelpfully cut across global and regional value chains. As the largest centre of production networks, East Asia has much at stake in the push back against an open, global rules-based trading system and the regional arrangements that support it.

While the direct economic costs of Trump turning America’s back on the TPP and other measures might be relatively small, the systemic costs are much larger.

As Shiro Armstrong and Amy King write in this week’s lead essay, Trump’s executive order to withdraw the United States from the TPP agreement in the Asia Pacific ‘is a strategic turning point in the open economic order. It is a blow to furthering reform for some members, a lost opportunity for the United States to write the rules of international commerce, and more worryingly a sign of the United States turning its back on the global economic system it helped create and lead’.

How can East Asia, which includes China and Japan — the world’s largest and fourth-largest trading nations — stand against the corrosion of a global trading order that is so central to their common economic and political interests?

The economies of East Asia must, of course, stand quietly firm in global and regional forums and in all their bilateral representations to the United States against the undermining of the global trading system, giving strength to those forces in America that can help to shape much better outcomes than the present circumstances threaten. But, through their own commitment to collective liberalisation and reform, they can also help to lead the system back from the brink.

With major multilateral trade deals at the WTO now too difficult and bilaterals only able to make slow and incomplete progress towards freer markets, Armstrong and King observe, all eyes now turn to Asia’s Regional Comprehensive Economic Partnership (RCEP) agreement. It is the most important initiative on the global trade scene.

Image result for flags of asean member statesASEAN is the hub of RCEP Agreement

RCEP comprises the 10 Southeast Asian members of ASEAN as well as Australia, China, India, Japan, New Zealand and South Korea. Though, as Armstrong and King say, there are many misconceptions about the RCEP enterprise.

‘The first misconception is that RCEP is China-led. But China is a spoke and ASEAN is the hub of the arrangement. RCEP was built to consolidate ASEAN’s five separate free trade agreements with China, South Korea, Japan, India and Australia–New Zealand. And the RCEP idea and its guiding principles were crafted not in China, but in Indonesia. ASEAN centrality has ensured that RCEP has incorporated Asia’s other large power — Japan — and reflects Japanese preferences as much as those of China. Originally, China wanted to limit core membership of Asian cooperation to ASEAN plus China, Japan and South Korea. Japan wanted a larger membership, involving Australia, New Zealand and India, to help provide a counterweight to China’.

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In the end, ASEAN centrality and the interests of Australia and India in the region meant a broader and representative group ideally placed to take the lead collectively on global trade.

‘With the world trading system under threat’, as Armstrong and King conclude, ‘it is time for leaders in Asia to step up and push for opening markets and deepening reforms to enhance economic integration, not just with each other but with Europe, the United States and the rest of the world’.

*The EAF Editorial Group is composed of Peter Drysdale, Shiro Armstrong, Ben Ascione, Ryan Manuel, Amy King and Jillian Mowbray-Tsutsumi and is located in the Crawford School of Public Policy in the ANU College of Asia and the Pacific.

http://www.eastasiaforum.org/2017/02/20/east-asias-agreement-to-keep-the-world-economy-open/

50 Year Old ASEAN–No Longer Business As Usual


February 10, 2017

50 Year Old ASEAN–No Longer Business As Usual

by Dr. Munir Majid@www.thestar.com.my

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IT is not business as usual. As ASEAN’s array of official and private sector meetings roll out for the year, urgent thought must be given to dramatically new challenges beyond the stubborn issues that continue to arrest the region’s meaningful integration.

The advent of Donald Trump as President of the United States has overturned many regional assumptions and threatens to cause economic as well as political turmoil. These developments should make ASEAN think crisis management – even if, in the end, the worst does not happen.

There are a number of “what ifs” which should be addressed.What if Trump causes a trade war to break out between America and China by imposing the punitive import duties on Chinese goods that he has threatened?

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It will then not be a simple outcome of relocation of manufacturing centres from China to low-cost Vietnam, for instance, as some have rather sanguinely suggested. The supply chains to which many ASEAN exports are linked for the finished Chinese product would be broken. There will be export disruption – not just for China.

There are countries in ASEAN, apart from Vietnam (90%), like Singapore (176%), Thailand (69%) and Malaysia (71%) whose exports amount to a substantial proportion of their GDP.

On top of exports through China, their own direct exports to the US will also be affected, as will any relocated exports from Vietnam.

There will be no winners in a trade war, no benefits to be derived from China’s apparently singular predicament. The knock-on effect will be widespread. In time, as excess capacity looks for export sales, dumping will become a problem, as will protection against it.

Motor cars that cannot get into America will have to go somewhere. Steel turned away from the US as Trump seeks to protect mills and jobs in the mid-west will have to be shipped somewhere else. Even the textile industry will be spinning in different directions as Trump has promised to revive it in America.

The whole global free trade ecosystem will go topsy-turvy. How will free trade within the ASEAN Economic Community, such as it is, be maintained? Can ASEAN+6 move on to the Regional Comprehensive Economic Partnership (RCEP) as the fallout from Trump’s America First trade policy hits the world?

Asia – and ASEAN – will have to stick together and carry on with the open, albeit reduced, global free trade and investment system. Will that happen?

Some ASEAN states with larger domestic economies are less dependent on international trade than others. Already, now, they take a different position on opening up their market. Will it get worse in the situation of stress, should it come about?

ASEAN must talk about these possibilities now, before they happen. Someone must take the lead. Too often this does not happen in ASEAN. Can the officials, or the secretariat, or the private sector do this scenario-setting for the ministers, for the leaders? Or is ASEAN going to carry on as if everything is not changing around it?

I am reminded of what George Orwell has been said to have remarked: In a time of universal deceit, telling the truth is a revolutionary act. The tendency to take to the ASEAN level what routinely happens in many ASEAN domestic systems should be snapped. Some functionary in ASEAN must warn the regional grouping of the dire threat facing it.

The other challenge facing Asia and ASEAN is the risk Trump poses to regional peace and stability. This comes from the challenge again thrown at China, this time in respect of its claim to the South China Sea. As China’s predominance in the disputed expanse of territory is by no means ideal, its exposure to a more counter-assertive and belligerent American stance under Trump – no Chinese access to islands artificial or militarised that do not belong to China “under international law” – may encourage claimant ASEAN states to be less compliant with the China-set path of dispute management.

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Since the law of the sea tribunal decision last July, there has been a lowering of temperature in the South China Sea dispute, even if at the cost of not highlighting the baselessness and futility of China’s claims under international law. The return has been a commitment by China in the diplomatic channeling with ASEAN to having a code of conduct (COC) finally in place this year – although only in framework form.

It has been a long-term ASEAN objective to have this COC for peaceful conduct in the South China Sea. China has hitherto been dragging its feet on this. With a more assertive American policy against China, would there be among ASEAN states a disposition to push with the US to get a better deal on the South China Sea?

This kind of geopolitical arbitrage may be attractive, but it would come at a longer-term cost to regional cooperation, which has become critical because of Trump’s foreign economic and trade policies. This is a dilemma ASEAN states would do well to address together.

Already, beyond ASEAN, India appears attracted to taking advantage of the predicament China might be in with Trump. India, of course, has long-standing border disputes with China, which Beijing has been happy to keep unresolved. At the same time, there is strategic competition between the two over their regional place in Asia.

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Another could be Japan which, again, has many unresolved disputes and issues with China. India, in particular, appears to want to flirt with Trump even at the cost of frustrating conclusion of the RCEP. The cost to India, however, could be isolation from the Asia-Pacific region for an uncertain alliance with Trump’s America.

You cannot do strategy with a counter-party whose leitmotif is transactional. With Trump it is not going to be win-win. It is going to be win-win-win for America.

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Trump’s Win For America First Foreign Policy

ASEAN states should want to address these profound issues. Even dissuade member and partner countries from wanting to sup with the devil, as it were.

China, of course, has not been the ideal big country partner beyond platitudinous statements and suffocation of ASEAN by money. Its actions in the South China Sea are not indicative of a great power that will not grind your face in the dirt if you did not do its bidding.

Will China become the good big brother it claims it wants to be, even as America becomes the bad and ugly one?

It looks like ASEAN might be caught between a rock and a hard place. Individual member states no doubt will be doing their calculation with the hope to position themselves in a better than survival mode.

However they will all be better off if they also worked together among themselves and partnered Asia-Pacific countries to achieve better economic integration, whose benefit will discourage them from playing dangerous geopolitical games.

So, as ASEAN under Philippines leadership looks at themes such as inclusive growth, an excellent focus, and addresses the many stubborn issues that are barriers to better integration, it must prepare also for the very difficult economic and political environment which will be fashioned by the Trump administration.

Tan Sri Munir Majid, Chairman of Bank Muamalat and visiting senior fellow at LSE IDEAS (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB ASEAN Research Institute.

 

Trump and Southeast Asia: Advantage China


November 12, 2016

Trump and Southeast Asia: Advantage China

by Tom Pepinsky

Tom Pepinsky is an associate professor in the government department and a faculty member of the Southeast Asia Program at Cornell University. He studies comparative politics and political economy, with a focus on emerging market economies in Southeast Asia. Read his blog at https://tompepinsky.com/

The days of a US administration that engaged substantively with Southeast Asia are soon to be over, writes Tom Pepinsky.

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Defying the expectations of nearly every US pollster and most mainstream pundits, Donald Trump has defeated Hillary Rodham Clinton in the 2016 presidential election.

As Americans adapt to the reality of Mr Trump’s victory, analysts are devoting particular attention to his foreign policy plans. For readers of New Mandala, and for half a billion Southeast Asians, the urgent question is what Mr Trump’s presidency will mean for Southeast Asia, and for US relations with the region.

Answering that question requires an understanding of the powers that US presidents have. Like in many other presidential systems, the US president does not make laws. Doing so requires legislative action. On issues of foreign policy, however, the US president has significant individual discretion to build a foreign policy team of his or her liking, and to pursue a relatively independent foreign policy accordingly.

On foreign policy issues, Mr Trump’s campaign rhetoric was bombastic, aggressive, and often self-contradictory. He has encouraged nuclear proliferation in Northeast Asia and the Middle East. He favours policies that could start a trade war with China. He has promised to build a wall with Mexico, and suggested policies that would abrogate US treaty commitments with NATO. His personal infatuation with Russian president Vladimir Putin is simply bizarre.

If there is any unifying theme, though, it is a move towards isolationism. His foreign policy outlook, as sketchy as it might be, is one that prioritises military strength, opposes foreign military adventurism, redresses what he perceives to be exploitative trade relations, and is profoundly wary of immigrants, especially Muslims and Mexicans. It is a view that resonates with the roughly one-quarter of the US electorate who voted for him.

How would such a US foreign policy affect Southeast Asia? Before proceeding, a very significant caveat is in order.

Prior to Tuesday evening, most American pundits and foreign policy analysts had not taken a Trump presidency seriously enough to consider what he might do in office, and especially what his foreign policy team might do. To my knowledge, there was hardly any of the normal jockeying among the Washington foreign policy establishment to shape Mr Trump’s foreign policy platform. This jockeying is only now happening; the same is true, incidentally, for his national security team.

This means that any predictions are tentative, and should be taken as such. They are the best that can be done in a situation with no precedent and fast-moving developments from a candidate who is both secretive and mercurial. With this caveat aside, two scenarios seem especially important to consider.

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One is a scenario in which Mr Trump pursues his isolationist line that asks Japan and South Korea to take greater responsibilities in regional security in Northeast Asia. This would have implications for regional security across the Asia-Pacific. In such a scenario, Southeast Asian countries—treaty allies (Philippines, Thailand) and new security partners (Vietnam) alike—might expect similar treatment, asked to shoulder a greater burden in providing for their own security.

But because Southeast Asian countries have weaker militaries and are more dependent on trade with China, their incentives would be to avoid confrontation with a far more powerful regional hegemon if they do not believe that a Trump administration would defend their strategic interests.

Another is a scenario in which Mr Trump respects security policy precedent but pursues a more aggressive anti-China stance on economic matters. Trade barriers, for example, might interrupt trans-Pacific trade flows. The consequences for Southeast Asia are hard to predict, but could include either a regional slowdown in trade, or alternatively an ever greater role for Southeast Asia as a trading partner for China.

Separate from these scenarios, and focusing on economic matters, what seems more likely is the end of the Trans-Pacific Partnership, which was opposed by both Trump and Clinton during the general election campaign. This would be a major setback for its signatories in Southeast Asia (Brunei, Malaysia, Singapore, and Vietnam). It would force these countries to rebalance their trade relations, perhaps with advanced economies like Japan and the EU, or perhaps with rising powers like China and India.

Some analysts privately believed that TPP, like NAFTA and other trade agreements, might actually survive under a Trump presidency, on the notion that US presidents tend to favor trade once in office, and that Mr Trump, a wealthy Republican, simply does not care about TPP but was willing to use it to win an election. Taking his word at face value, however, suggests a decisive move towards protectionism. Withdrawal from TPP is an agenda item for his first 100 days in office.

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The frustrating conclusion is that it hard to know what the next four years will mean for Southeast Asia with Mr Trump in office. Because Southeast Asia presents few acute security or economic challenges at the moment, the region may be fortunate enough to see business as usual, with career diplomats in ambassadorial positions, trade and investment continuing, military-to-military cooperation as before.

But even if business continued as usual, the scenarios outlined above would still have indirect effects on Southeast Asian countries’ security and economic interests.

One thing is almost certain, however: the days of a US administration that engaged substantively with Southeast Asia are soon to be over. President Barack Obama’s “Pivot to Asia” meant that his administration considered the region to be one of core strategic interest. Given his personal ties to Indonesia, Southeast Asia has figured relatively prominently.

It is hard to imagine that Mr Trump cares enough about Southeast Asia to match President Obama’s level of engagement.

Tom Pepinsky is Associate Professor of Government at Cornell University and blogs here.

http://www.newmandala.org/president-trump-southeast-asia/

The Hopeful Alternative: A “Brivot” to Asia may now be in order for Britain


July 10, 2016

The Hopeful Alternative: A “Brivot” to Asia may now be in order for Britain

by Bunn Nagara

http://www.thestar.com.my

Instead of being the end of the good old EU days, Brexit may just be the beginning of Britain’s new productive relations in Asia.

FROM the start, arguments over Brexit had been skewed on several fronts. Mainstream international media tends to be negative about Britain’s exit from the EU. The ills of withdrawal are often seen to overshadow the benefits.

Since a majority of Britons voted for Brexit for distinct reasons, why do media reports fail to portray its benefits – whether substantive or perceived – at least half the time? This may be due to corporate media interests, since EU regional integration favours them over those of small and medium enterprises (SMEs) disproportionately saddled with the costs of EU regulations.

 There is also the secondary causality factor, or “opprobrium by association”. For example, Donald Trump – seen as inhospitable to migrants from minority communities – mistakenly endorses Brexit for shutting out immigrants, so those who consider themselves more liberal on immigration policy reject Brexit for being “xenophobic”.

EU membership in fact discriminates in favour of mainly white European migrants and job-seekers, against those from other continents and even Commonwealth countries.

What’s Up, Mr.Churchill

http://www.usnews.com/news/articles/2016-06-28/how-britain-could-undo-the-brexit

Disentangling itself from the EU allows Britain to form new associations and develop old ones with other countries independently. Prime Minister David Cameron and former Defence Minister Dr Liam Fox mentioned the Commonwealth countries as being among them.

Third, the media disinclination to Brexit may also be caused by the lack of quantifiable benefits, real or anticipated, readily shaped into prime time sound bites. It is much easier to cite the trade volumes Britain may lose in Europe than the greater democratic prerogatives that Britons would enjoy.

Yet even this does not explain the common bias against Brexit. The anticipated or presumed losses, however detailed in numbers, are no more than projections and extrapolations since Britain has yet to leave.

Since both the costs and benefits of Brexit are equally notional or hypothetical, they should be entitled to equal time. But pro-Brexit hopes, aspirations and promise are not entertained anywhere as much as anti-Brexit doom, gloom and warnings.

Even champions of Brexit have been distracted from their primary task in having to defend their position against critics. They might have argued that Britain’s best years were before joining the European project, while many an EU country has seen its worst years after joining it.

The reasons for the rise and fall of European powers are complex and need not directly implicate the EU. But the fact that for decades “Europe” has failed to arrest and reverse the decline of once-mighty colonial powers seems to testify to the EU’s limits.

For now the bigger questions are: must Brexit mean assured decline for Britain, and are there no silver linings at all? EU ideology aside, Brexit can have tangible benefits and some are already emerging.

On July 7, the Wall Street Journal reported that the plunge in interest rates caused by Brexit has produced a spike in US mortgage refinancing. Mortgage rates have fallen along with long-term rates. An index of refinancing activity for the week ending July 1 rose 21%, the highest in 18 months.

On the same day, Associated Press reported that European stock markets rallied in anticipation of the US Federal Reserve holding off on raising interest rates. The lower rates may hold until next year.

Politically, British-US relations are likely to improve as well without a European “filter”. Their “special relationship” is unfazed by Brexit and may grow in the absence of continental encumbrances.

British Secretary of State for Business, Innovation and Skills Sajid Javid is already on a five-nation tour to discuss new and improved trading arrangements.

His first destination was India, which has huge investments in Britain. India’s growth is no less than China’s at some 7%, at a time when all other emerging economies are slowing.

India is already the third-biggest foreign investor (fdi) in Britain, and may soon tie with France for second place. Over the last decade the number of British companies operating in India grew 300%. Today, more than 800 Indian companies in Britain employ well over 110,000 people, while British companies in India employ about 691,000 people. All of this is set to grow on both sides.

Other Commonwealth countries in South Asia are Bangladesh, Pakistan and Sri Lanka. Although many Commonwealth members are small with little economic heft, the major countries in South Asia are in it.

The other countries on Sajid’s list are China, Japan, South Korea and the US. All major economies in North-East Asia are covered, including the world’s second- and third-biggest.

Despite the relative decline in China’s growth data, it is still the world’s most promising economy over the longer term. Vastly improved trade with China remains the grand bargain of many developed countries, particularly those in Europe.

As the jewel in Britain’s mercantile “crown” for centuries, trade with China is not to be underestimated. It was the prime reason for Imperial Britain’s involvement in the “Far East,” including Borneo (Brunei, Sarawak, British North Borneo or Sabah) as a convenient way station for sailing ships to Chinese ports.

Centuries ago, European countries were so strong that they competed among themselves for overseas territories as colonial possessions. Today, the EU is desperately holding them together to prevent many an individual slide into history’s abyss.

As a region, modern East Asia is the hub of global economic activity when it was once divided by various European imperial powers. After an initial focus on North-East Asia, post-Brexit Britain may soon consider building on its links with South-East Asia.

Of the 10 ASEAN countries, four had been part of the British Empire with three of them in the Commonwealth today. Other ASEAN members such as Thailand have also had centuries-old trade with Britain.

However, in upgrading its ties in this region, Britain should avoid the mistake of France in the 1990s.Depending narrowly on nostalgia in the Francophone countries of Indochina to boost its regional influence, Paris found itself irrelevant as the rapidly developing region passed it by.

During the Cold War, Soviet influence meant the older French-speaking generation had been replaced by Russian, then later German speakers, with technical training sourced in East Germany. Few Francophiles have survived.

Today, the CLMV countries are more interested in learning English for better progress in a globalised world. Meanwhile, the US “pivot” focuses on militarism rather than economics.

In the colonial era Britain led Europe in carving out the largest expanse of overseas territories and possessions. More recently, it again led Europe in signing on as a founding member of the China-led Asian Infrastructure Investment Bank (AIIB).

Now, Britain has struck out again on its own to exit the EU, whether or not other member nations follow. The impulse remains to act distinctly and uniquely based on its perceptions of its best interests.

A “Brivot” to Asia may now be in order for Britain. As with Brexit’s concern over immigration, it is about exploring new vistas, not shunning contemporaries by retreating into the past.

Through the AIIB and later One Belt, One Road, Britain could be instrumental in forging vastly productive linkages between East Asia, South Asia, Central Asia and Europe.

That could help revitalise Europe in a way no EU country could have imagined. By then, Brexit would be fully vindicated.

Bunn Nagara is a Senior Fellow at the Institute of Strategic and International Studies (ISIS) Malaysia.